Compete globally while acting local

It is indeed a worthwhile cause to promote domestic industry, so there is every reason to be vocal about the local, as the prime minister put it. However, that does not mean championing shoddy quality or excessive costs. The only way to ensure that local produce is of high quality and priced optimally is to benchmark local production against the global competition. Being global is necessary to produce quality local produce. This should not be lost sight of, in a frenzy of creative interpretation of the prime minister’s new mantra.

Multinational companies want to know if they would be shut out from any and every government tender that is below Rs 200 crore in value. Such tenders could be for a great many things, ranging from medical supplies to batches of vaccines to ventilators, to advanced machinery. If these foreign company worries are valid, India would be forgetting the experience of the pre-reform days when a range of Indian companies existed, including in India’s public sector, merely to import practically every single value-added component, add in some local screws and come up with high-priced ‘indigenous’ products to stand tall as local champions. The country and its industrial potential gain nothing from such spurious indigenisation. Indian industry has to spend on R&D, master high-quality production, value and keep upgrading its human talent and compete against the best in the world, to emerge true world-beaters, about whom Indians can be proud and vocal, in all honesty.

India cannot gain global quality with a broken power system, banks too scared to lend, a dysfunctional bond market and customs clearance and ship turnaround at ports taking several times as long as in other economies. We have to fix these, to boost the local.

This piece appeared as an editorial opinion in the print edition of The Economic Times.